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- Debashree Patra
Debashree Patra
- Reviewed by:
Nidhi KolhapurNidhi is a Certified Digital Marketing Executive and Passionate crypto Journalist covering the world of alternative currencies. She shares the latest and trending news on Cryptocurrency and Blockchain.
- Aug 18, 2025 11:08 UTC
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Why China’s Economic Stimulus May Be the Catalyst for the Next Crypto Bull Run
China’s weak economic data raises expectations of fresh PBOC stimulus as early as September, a potential boost for crypto liquidity.
Altcoins could benefit if Beijing injects cash into markets, reviving risk appetite despite ongoing global and regulatory risks.
China’s economy is showing cracks, and the People’s Bank of China (PBOC) may soon roll out fresh stimulus to inject life back into the system. For crypto investors, especially those watching altcoins, this could be the big catalyst they’ve been waiting for.
Economic Weakness Forces Beijing’s Hand
Recent data paints a worrying picture. Retail sales slipped by 0.1% in July, while fixed-asset investment plunged 5.3% year-on-year, the sharpest fall since the 2020 pandemic shock. Industrial output barely grew, up just 0.4%. On top of that, unemployment ticked higher to 5.2%. With such numbers, Bloomberg economists from Nomura and Commerzbank expect the PBOC to step in with stimulus, possibly as soon as September.
Why Stimulus Matters for Crypto
Central bank action usually takes the form of interest rate cuts or special financing conditions, which expand the money supply and make borrowing cheaper. More liquidity tends to lift risk assets like stocks and, historically, cryptocurrencies. A report by 21Shares earlier this year even showed Bitcoin has a 94% correlation with global liquidity, stronger than gold or the S&P 500. If China starts pumping money into its system, altcoins could ride the wave and potentially push past old highs.
While China weighs its moves, U.S. markets are also flashing signals that matter for crypto. Despite recession fears, the S&P 500 hit record highs above 6,400. Treasury yields also rebounded, showing investors are willing to take on more risk. This backdrop of resilience in America, paired with possible Chinese stimulus, creates a perfect setup for altcoin momentum.
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Altcoins in the Mix
Before China’s 2017 crackdown, the country was a hotspot for crypto, with projects like NEO and VeChain enjoying strong local support. Even now, despite tight restrictions and only about 5.2% ownership, Chinese investors often access crypto markets through offshore platforms. If stimulus flows into the economy, demand for altcoins with Chinese ties and the broader market could see renewed strength.
Risks Still Remain
That said, the outlook isn’t without uncertainty. Global recession fears, regulatory hurdles, and ongoing U.S.-China tensions could limit gains. If stimulus policies are short-lived or fail to impress, the altcoin rally may be more muted. For now, all eyes remain on Beijing’s next move.
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FAQs
China’s weak retail, investment, and output data push the PBOC toward stimulus to revive growth.
More liquidity from Beijing could lift risk assets, fueling momentum in Bitcoin and altcoins.
Global recession fears, strict regulation, and U.S.-China tensions could cap market upside.
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